LONDON, UK / ACCESSWIRE / August 25, 2016 / Active Wall St. announces its post-earnings coverage on Ross Stores Inc. (NASDAQ: ROST). The company reported its second quarter fiscal 2016 results on August 18, 2016. The company, which operates Ross Dress for Less® the largest off-price apparel and home fashion chain in the US, posted better than expected results driven by higher than expected growth in comparable-store sales (comps). Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the second quarter ended on July, 30, 2016, Ross Stores reported net income of $281.9 million, or $0.71 per share, up from $258.6 million, or $0.63 per share, in the year ago period. Results came in ahead of the company's guidance of earnings which was in the range of $0.64 to $0.67 per share and they also topped analysts' expectation of earnings of $0.67 per share. Sales rose 7.2%, to $3.18 billion, above the $3.13 billion projected by analysts, and was attributed to positive response from value-focused customers to the company's extensive collection of brand bargains.

Comps Grow

For Q2 FY16, Ross Stores' comps grew 4% on y-o-y basis, above the 1% to 2% range projected by the company and the 2.1% jump expected by analysts. Operating margin expanded 50 basis points (bps) to 14.4% on y-o-y basis bolstered by higher merchandise gross margins.

Ross was not alone in posting growth in comps as fellow discount retailer The TJX Co. Inc. reported 4% Comp Sales Growth and 5% increase in earnings per share on August 16, 2016.

Store Update

During Q2 FY16, Ross opened 24 new Ross and 7 dd's DISCOUNTS stores, remaining on track with its store growth plans. In total, the company has 1,501 stores as of July 30, 2016, compared to 1,424 stores at August1, 2015.

Financial Position

As of July 30, 2016, Ross Stores had cash and cash equivalents of $927.72 million and long-term debt of $396.26 million compared to cash and cash equivalents of $630.29 million and long-term debt of $395.79 million as of August 1, 2015.

Share Repurchase

During Q2 FY16, Ross Stores repurchased 3.1 million shares for approximately $176 million, bringing the YTD repurchases to about 6.2 million shares for $352 million. The company plans to buy back a total of $700 million in common stock during fiscal 2016 to complete the two-year $1.4 billion authorization approved by its Board of Directors in February 2015.

Guidance

The discount retailer increased its annual forecast with earnings now ranging between $2.69 a share to $2.75 a share, up from the prior guidance of $2.63 to $2.72 per share. For Q3 FY16, the company is projecting earnings in the range of $0.52 per share to $0.55 per share, while analysts were modeling for $0.57 per share. Total sales for the current quarter are estimated to grow in the range of 4% to 5%, with comps expected to be up between 1% and 2%.

Stock Performance

Ross Stores' shares vacillated between $64.31 and $63.66 during yesterday's session, before settling at $63.87 at the closing bell, slightly down 0.67% from its previous closing price. The stock recorded a total volume of 2.42 million shares. For the last three months and the previous twelve months, the company's share price has advanced 19.89% and 36.56%, respectively. Moreover, since the start of the year, shares of Ross stores have gained 19.28%. The stock traded at a P/E ratio of 25.02.

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SOURCE: Active Wall Street